How to End This Pandemic, and Prepare for the Next One; Flood of Day Traders Strains Online Brokers and the Backlash Is Swift

Dec 9, 2020

First Read

$17,661/$300,000 (5.9%)
John Davidson

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Hits & Takes
JLN Staff

OCC CEO John Davidson is the latest donor to the JLN MarketsWiki Education GoFundme campaign. Davidson is a derivatives clearing veteran who has emerged as an industry thought leader at the revamped OCC. Thank you to John and all who have given and all those who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

Today we have a video for The Path to Electronic Trading series featuring CQG’s Kevin Darby. I first met Kevin when he was at Blue Trading Systems and was a client of Jessica Darmoni. Darby is a good example of someone who came into the industry at a time when open outcry was still vibrant, but electronic trading was ascendent. The opportunities for Kevin were not in standing in a trading pit, but in developing software to trade the electronic markets. His development of an electronic eye to identify mispriced bids or offers, combined with CBOE moving the RAES order flow to CBOE Direct, created the profits and the opportunity for him to become a partner in Blue Capital Group. When the firm closed up, they sold the technology BCG had to Darby and others, who formed Blue Trading Systems. Eventually, BTS was sold to CQG and Darby went with the technology. You will like Kevin’s story.

It is ICE Chairman and CEO Jeff Sprecher‘s day in the barrel at Huff Post with a story titled “Sen. Kelly Loeffler’s Husband Bought Stock In Sectors Set To Benefit From Then-Secret Bill.” One would hope that someone of stature at ICE and knowledge of Jeff’s investing would write an op-ed defending him. But then, I think the strategy is probably to keep ICE and NYSE out of the Georgia Senate race.

Quantitative Brokers put out an official press release naming Timothy Gits as chief sales officer.

Director of Commodity Research and Product Development Jim Sullivan at the CME Group has published a research piece titled “How COVID-19 Impacted Beef Markets in 2020.”

The Chicago Tribune is reporting that the state of Indiana has the second highest per-capita COVID-19 spread the CDC says. This would be the state from which Vice President Pence and head of the White House coronavirus task force is from. Amazing how that worked out.

The headline of the day comes from the New York Times about Uber selling its self-driving car business. The headline is “Uber Jettisons Flying Car Project.” That is worth four woofs from the Jetsons’ dog Astro.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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Germany’s Bankhaus von der Heydt (BVDH), one of the world’s oldest banks, is working on issuing a euro-based stablecoin on the Stellar network with the digital asset tech firm Bitbond.~MR

Coinbase U.K. reported a 22 percent decrease in profit in 2019. It also probably doesn’t help that the U.K.’s FCA has not exactly shown warm sentiment to the cryptocurrency and blockchain space lately.~MR

The OIC is hosting a webinar today at 3:30 CST titled, “The Greeks: Delta and Gamma.” As you might have guessed, the webinar will focus heavily on discussing Delta and Gamma with respect to options trading, as well as gamma scalping and the iron condor strategy.~MR

Holly Duran Real Estate Partners LLC (HDREP), a boutique commercial real estate services firm headquartered in Chicago, has joined Colliers International Chicago (Colliers), announced Jim Carris, executive managing director and market leader. The firm is led by one of the most influential and successful women in the industry today, Holly Duran, who will serve as principal and financial services lead for the global brokerage’s local office. In addition, Duran’s brokerage partners have also joined the firm, with Jeff Mulder serving as executive vice president, and Lois Durkin and Jeff Newcom serving as senior vice presidents, with Colliers’ Occupier Services Group based in the firm’s downtown office.~JB

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Kevin Darby – The Path to Electronic Trading – MarketsWiki Education
JohnLothianNews.com

Kevin Darby started his career as a college kid on the CBOE trading floor and bridged the open outcry and electronic trading eras by using his knowledge of trading floor processes and trading, his mathematical skills and his programming skills. That was his path to electronic trading.

Watch the video »

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The Psychological Formula for Success After Age 50; Grit is the secret ingredient for an exceptional third act.
Arianne Cohen – Bloomberg
Julia Child launched The French Chef on TV at 50, a year after publishing Mastering the Art of French Cooking. Ray Kroc began franchising McDonald’s at 52. Estelle Getty landed her breakout role on Broadway at age 58, then in her 60s racked up seven back-to-back Emmy nominations for The Golden Girls. These are all clearly exceptional third acts, but even if you aim for something more modest, you’re likelier to get there if you understand how the psychological formula for achievement shifts as you age.
/bloom.bg/2VYaGmk

*****If there is one thing I have it is grit. Grits are another thing.~JJL

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Fidelity Had ‘Locker Room’ Culture, Ex-Employee Says in Lawsuit
Annie Massa, Max Abelson, and Michael McDonald – Bloomberg
She alleges a male colleague lampooned her pregnancy; ‘Hostile work environment’ described in New Hampshire office
A former Fidelity Investments employee claims she was taunted by two male colleagues who openly made offensive remarks about her pregnancy, race, women’s bodies and slavery.
/bloom.bg/370a8CL

*****It would be nice for a firm like Fidelity to have employees that live up to its name.~JJL

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Lessons From the Pandemic: Tips From Eight Productive People
Arianne Cohen – Bloomberg
The combination of working at home, juggling child care, and pivoting entire business plans on short notice because of the coronavirus outbreak has forced us all to learn new tricks. Here are skills some productive people have picked up this year.
/bloom.bg/36XGnCy

*****Lesson number one should be to get out of bed. But then again, why?~JJL

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Colliers acquires veteran Cboe, CME real estate rep’s firm; Longtime financial sector tenant rep Holly Duran has sold her boutique brokerage after a 16-year run.
Danny Ecker – Crain’s Chicago Business
The longtime real estate adviser for the Chicago Board Options Exchange and Chicago Mercantile Exchange has sold her boutique brokerage to Colliers International Chicago.
/bit.ly/3grx68N

*****For the record, JJLCO was a Holly Duran client when we rented space in the CBOT Building.~JJL

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Tuesday’s Top Three
Our top story on Tuesday was about Challenger data provider, Exchange Data International EDI challenges new CME fees as anti-competitive and illegal. EDI wrote to the CFTC, the heads of relevant Committees of the U.S. House of Representatives, and the U.S. Senate requesting they investigate the CME Group’s plans to charge for what had been a no-fee service. Coming in second was the Washington Post’s account of Kelly Loeffler’s performance in Sunday’s debate in Georgia Kelly Loeffler disqualified herself at Sunday night’s debate. And third was the Financial Times’ story Russian oligarch’s son racked up $50m in day trading losses, about a Russian oligarch’s son’s massive trading losses while he was a student.

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Lead Stories

How to End This Pandemic, and Prepare for the Next One; A group of experts gathered to debate vaccines, inequality and repairing the nation’s battered institutions.
Corinne Purtill – NY Times
The Food and Drug Administration will hold a hearing this week to determine whether to grant emergency authorization to a coronavirus vaccine developed by Pfizer and BioNTech. The vaccine, which the companies claim is 95 percent effective, is one of two that could be ready for injections in the United States before the end of this year. The other, by Moderna, will be considered by the regulator for emergency approval next week. In early trials, the vaccine appeared to prevent the development of Covid-19 in around 94 percent of recipients.
/nyti.ms/2K1jgxP

Flood of Day Traders Strains Online Brokers and the Backlash Is Swift
Annie Massa – Bloomberg
Interactive Brokers’ systems experienced severe outage Monday; It was the latest high-profile issue at a retail brokerage
The trouble began about 9 miles northwest of the New York Stock Exchange, in a squat, unremarkable building. There, inside a critical data node in the U.S. financial system, a crucial piece of hardware failed. Like a downed electrical line in some faraway corner of the power grid, that breakdown effectively turned the lights out for a swath of investors across the nation. Irate traders woke up to discover they’d been locked out of their accounts at one of the nation’s leading electronic brokers, Interactive Brokers Group Inc.
/bloom.bg/2K4BwGA

Why Water Won’t Make It as a Major Commodity; There’s good reason to believe H20 will never be traded globally. But the benefits of pricing it are clear.
David Fickling – Bloomberg
There’s no commodity more central to human activity than the one that makes up 60% of our bodies. So why isn’t water a fixture of financial markets the way gold, crude, copper and soybeans are?
/bloom.bg/2VVPRHZ

TSE change opens window for Bain to revive Kioxia IPO; Rule revision would enable a smaller listing than planned but more rapid bookbuilding
Leo Lewis and Kana Inagaki – FT
A landmark change in Japanese stock market rules has presented Bain Capital with the opportunity to revive the initial public offering of Kioxia, the former memory chip-making unit of Toshiba, after a listing was shelved amid US-China trade tensions. The Tokyo Stock Exchange rule change would allow the private equity firm to sell a 10 per cent slice of the chipmaker to investors before the current window closes in February, said people familiar with Kioxia’s listing plans.
/on.ft.com/3n2KYJ0

MarketAxess Launches Centralized Fixed Income Trading Marketplace with Integrated U.S. Treasury Market Liquidity
MarketAxess Holdings Inc.
MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced the launch of a centralized fixed income trading marketplace that fully integrates rates trading capabilities within the MarketAxess trading system.
/bit.ly/3mZWmW8

ICE Data Services Launches Premium Hosting Services; Offers ultra-low-latency market access and managed infrastructure; Netrix collaboration provides additional hardware procurement, management and support
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced the launch of its premium hosting services and its managed services offering with Netrix.
/bit.ly/39VG5xW

BTC-e Operator Vinnik Sentenced to 5 Years in Prison on Money Laundering Charges
Anna Baydakova – Coindesk
Alexander Vinnik, an alleged operator of the now-defunct cryptocurrency exchange BTC-e, was sentenced to a five-year prison term for money laundering on Monday.
/yhoo.it/370a8Tf

Bitcoin exchange founder sentenced to prison for money laundering; The DOJ believes Alexander Vinnick ran BTC-e as a front for a money laundering operation.
Mariella Moon – Endgaget
Alexander Vinnick, the Russian man who founded and ran the now-defunct Bitcoin exchange service BTC-e, has been sentenced to five years in prison. A Paris court has found Vinnick guilty of money laundering and has ordered him to pay EUR100,000 (US$121,000) in fines. Vinnick was arrested in Greece back in 2017 under an international warrant issued by the US Department of Justice and was extradited to France earlier this year.
/engt.co/2K2sHNw

The Small Exchange Launches New 10-Year Treasury Yield Future; Small Treasury Yield / S10Y Is the First Product that Allows Trading of Treasury Futures in Yield
Small Exchange
The Small Exchange, a futures exchange offering smaller, simpler products aimed toward retail customers, has launched Small Treasury Yield (S10Y) futures – the first product to afford customers the ability to trade treasury futures in yield not price.
/bwnews.pr/3guUQJp

Billionaire Shocked by Son’s Quick $50 Million Trading Loss
Jonathan Browning – Bloombergg
Temur Akhmedov sued by his mother over $600 million divorce; Temur accused of helping father hide assets in divorce case
A Russian billionaire’s son who lost more than $50 million while day trading at university told a London court that he “let down” his father, a billionaire who “never lost his sense of the value of money.” Temur Akhmedov is testifying in a London court, where his mother is accusing him of working with his father, Farkhad Akhmedov, to hide assets after their divorce. Temur denies the accusations, saying he lost much of the funds.
/bloom.bg/3gs6nsG

San Francisco’s 35% Plunge in Rents Shows Effects of Tech Fleeing City; The rise of remote work in the wake of the Covid-19 pandemic is remaking one of America’s priciest places to live.
Sophie Alexander – Bloomberg
Tech stocks are soaring and high-profile initial public offerings are set to mint millionaires. Yet in San Francisco, the boom times are over. The resurgent coronavirus has thrust the tech hub back into lockdown. Offices sit empty as work-from-home policies stretch indefinitely. While this week’s share sales of hometown companies Airbnb Inc. and DoorDash Inc. would typically have the city girding for a flood of wealth, many workers have already fled for the suburbs, Lake Tahoe or beyond.
/bloom.bg/371FUiO

World’s Oldest Central Bank Says New Crisis Tools Are Needed
Ott Ummelas and Rafaela Lindeberg – Bloomberg
The governor of Sweden’s central bank, the world’s oldest, said monetary policy can’t keep using old instruments to address new crises, and suggested that he and his peers will need to embrace more unconventional measures in the future. “We need to stand ready to develop new tools and make new kinds of analysis — so that we can reach our inflation target,” Governor Stefan Ingves said in a speech on Tuesday. “If the world changes, we need to change with it.”
/bloom.bg/2VVz0VJ

Merkel warns EU is prepared to accept no-deal Brexit; German chancellor says way must be found to manage risks of regulatory divergence as Johnson prepares for crunch meeting
Jim Brunsden and Sam Fleming, Guy Chazan and George Parker – FT
Angela Merkel said on Wednesday that Britain and the EU must figure out a way to minimise the risk of unfair competition between their markets, warning that Brussels will accept a no-deal outcome in trade talks if this cannot be achieved.
/on.ft.com/3712EiN

Future of the City: how London’s reach will shrink after Brexit; In the first of a series, Jonathan Ford explores the history of a financial powerhouse and the potential impact of leaving the EU
Jonathan Ford – FT
In the summer of 1962, a City of London banker wrote to Lord Cromer, the governor of the Bank of England, about a “certain exchange of ideas” that was taking place among well-connected individuals in Britain’s financial capital.
/on.ft.com/3n6UXxi

Bank capital buffers aren’t working; Regulators must rethink overlapping Basel III requirements before the next crisis
Lars Rohde – FT
The way bank capital requirements are designed has changed for the better since the 2008 financial crisis. Yet, regulators are becoming increasingly concerned that here, as in many aspects of life, too many cooks may spoil the broth. We must all review our regulations to make sure that the capital buffers can serve their purpose and genuinely allow banks to absorb losses when the next crisis hits.
/on.ft.com/3lUJr6A

How Pandemic Aid Attracted Hordes of Gleeful and Gutsy Scammers; The Paycheck Protection Program offered small businesses a few months of relief, but prosecutors will be running down fraud for years.
Stacy Cowley – NY Times
Chris Hurn wasn’t surprised scammers were trying to get government money. An enormous relief effort like the $523 billion Paycheck Protection Program is bound to attract grifters. As thousands of applications for government-backed loans flooded into his firm, Fountainhead Commercial Capital, it reported at least 500 suspicious cases to federal officials, Mr. Hurn said. But what shocked him was the brazen glee of the scammers who got money anyway.
/nyti.ms/3gtTMoR

R.J. O’Brien Wins 2020 FOW International Award for Non-Bank FCM of the Year
R.J. O’Brien & Associates LLC
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today won the 2020 FOW International Award for Non-Bank Futures Commission Merchant (FCM) of the Year from Global Investor Group. This is the fifth consecutive year RJO took the category in the global awards, this year announced at a virtual awards ceremony.
/bit.ly/3oydt1N

Goldman and Morgan Stanley Ready to Share More Diversity Data
Max Abelson – Bloomberg
Susan Reid told Bloomberg’s New Voices that the time was right; ‘It’s a way to show the world we’re going to be accountable’
After years of avoiding full transparency on workforce demographics, two of the biggest U.S. banks, Goldman Sachs Group Inc. and Morgan Stanley, said they’re ready to open up.
/bloom.bg/3n2AsBB

Goldman’s Metal Bull Has Tunnel Vision; Commodities optimists may be too focused on the light at the end rather than the surrounding darkness.
Clara Ferreira Marques – Bloomberg
The metal bulls are charging. Goldman Sachs Group Inc., which sees a commodities rally ahead on a par with the 2000, says copper could test its record high of just over $10,000 by 2022. The metal has already surged to almost $8,000 this year. Nickel is also on a tear, zinc has climbed more than 50% since March, and iron ore is closing in on $150 a ton. The post-Covid future does look rosy. Only, we’re not there yet.
/bloom.bg/2Kb96uo

Astra Shot Better at Stopping Covid Than Slowing Transmission
Stephanie Baker – Bloomberg
Vaccine reduced asymptomatic infections by 27%, study shows; Lancet report confirms vaccine’s 70% efficacy against illness
A vaccine from the University of Oxford and AstraZeneca Plc shows only a limited ability to stop transmission of the coronavirus despite preventing Covid-19 illness in a majority of those who are infected.
/bloom.bg/3n30ip0

Fauci Calls Coronavirus Vaccine a Game Changer, Decries Misinformation; Deborah Birx, White House coronavirus-response coordinator, reiterates call for states to use public-health measures
Stephanie Armour – WSJ
Anthony Fauci said a vaccine could diminish coronavirus as successfully as the polio vaccine did for polio, enabling workers to return to offices and restaurants in the second half of 2021.
/on.wsj.com/2JHFHZg

Coronavirus

German Covid-19 Deaths Rise the Most Since Start of Pandemic
Mariajose Vera and Andrew Blackman – Bloomberg
Daily casualties have increased dramatically in recent weeks; Saxony plans closure of all non-essential shops from next week
Germany’s daily coronavirus-related deaths rose the most since the outbreak began, highlighting the government’s struggles to contain the spread of the disease. There were 568 fatalities in the 24 hours through Wednesday morning, taking the total to 20,002, according to data from Johns Hopkins University. That exceeded the previous high of 510 in mid-April.
/bloom.bg/3n1rxR0

U.K. Says Those With Severe Allergy Should Avoid Pfizer Shot
Emily Ashton and Naomi Kresge – Bloomberg
People with a significant history of allergies should not currently receive the Covid-19 vaccine from Pfizer Inc. and BioNTech SE, the U.K.’s National Health Service said, after two people experienced reactions from the shots. The warning on Wednesday came a day after the U.K. became the first western nation to begin a Covid vaccination program, following approval of the shot last week by the Medicines and Healthcare Products Regulatory Agency.
/bloom.bg/36X2lWf

Oxford-AstraZeneca Vaccine Effective But Questions Remain for Elderly
Suzi Ring, James Paton, and Stephanie Baker – Bloomberg
Shot prevents severe disease, but more data needed on over-55s; Detailed trial results published in The Lancet medical journal
On the day Britain began immunizing its population with a Covid-19 shot developed by Germany’s BioNTech SE and the U.S.’s Pfizer Inc., a peer-reviewed study of the U.K.’s homegrown vaccine left some key questions unanswered.
/bloom.bg/2Iu0MFJ

China State-Backed Covid Vaccine Has 86% Efficacy, UAE Says
Bloomberg News
UAE plans to roll out shot publicly after trial of 31,000; Abu Dhabi looks to restart economic activity in two weeks
China’s state-backed coronavirus vaccine protected 86% of people against Covid-19 in trials conducted in the United Arab Emirates, state media there reported, giving credence to the quickly developed shot that Beijing intends to distribute around the developing world.
/bloom.bg/2K7nbt7

Sweden Proposes New Covid Law to Let It Shut Down Businesses
Niclas Rolander – Bloomberg
Sweden’s government proposed a law that would give it the power to close stores in response to a worsening pandemic. The bill, which would allow the minority coalition to cut shops’ opening hours and limit footfall, is due to take effect in March if it makes it through the consultation process, Minister of Health and Social Affairs Lena Hallengren said on Wednesday. She stressed that the government would only shutter businesses as a last resort, if parliament agrees.
/bloom.bg/3n2secG

UK regulator issues allergy warning on Pfizer/BioNTech vaccine; People with ‘significant’ history of allergies told to avoid jab after 2 NHS staff suffer adverse reactions
Jasmine Cameron-Chileshe, Donato Paolo Mancini and Joe Miller – FT
People with a significant history of allergies should not receive the Pfizer/BioNTech coronavirus vaccine, the UK medical regulator has said, after two NHS staff experienced an adverse reaction.
/on.ft.com/36ZPqTv

Pandemic leaves over-50s with uncertain job prospects; Young people were hard hit by the crisis but older workers will struggle with long-term unemployment
Delphine Strauss – FT
The Covid-19 crisis has forced thousands of young people to move back in with parents as their jobs evaporated, courses went online or city flats lost appeal.
/on.ft.com/2VSRtT3

Pfizer/BioNTech vaccine starts working 10 days after first dose, says FDA; Trump ‘very hopeful’ regulators will grant emergency approval in US ‘within days’
Hannah Kuchler and Kiran Stacey – FT
Pfizer and BioNTech’s Covid-19 vaccine starts to work within about 10 days of the first dose, according to new documents released by the US regulator ahead of an advisory meeting this week to discuss whether to grant it emergency approval.
/on.ft.com/2K6icJ0

No drinking for two months after COVID-19 vaccine, Russia tells citizens
Zachary Folk – NY Post
Russian officials are warning citizens to avoid alcohol for two months after receiving the country’s COVID-19 vaccine — tough-to-swallow news for one of the world’s heaviest drinking countries.
/bit.ly/2VVFJ1V

Merkel Pleads for Christmas Sacrifice to Protect Loved Ones
Arne Delfs and Raymond Colitt – Bloomberg
Chancellor calls for closing stores, early school holidays; ‘We need to make one more effort,’ she tells lawmakers
Chancellor Angela Merkel urged Germans to rein in Christmas celebrations, making an unusually emotional appeal as the country’s soft shutdown fails to slow the coronavirus spread.
/bloom.bg/2VYMCQ1

Rich countries are hoarding Covid-19 vaccines and leaving the developing world behind, People’s Vaccine Alliance warns
Rob Picheta, CNN
‘It didn’t hurt at all’: 91-year-old Briton on receiving Covid-19 vaccine ‘It didn’t hurt at all’: 91-year-old Briton on receiving Covid-19 vaccine 04:14
London (CNN)Rich countries have bought enough Covid-19 vaccine doses to immunize their populations three times over, an international vaccine watchdog has said, but developing countries are being left behind in the global sprint to end the coronavirus pandemic.
/cnn.it/36XkiUD

California Chicken Processor Reopens Plant After Deep Cleaning for Coronavirus; Meat producers have been spending on safety initiatives to prevent and contain coronavirus outbreaks and keep plants operating
Micah Maidenberg – WSJ
Foster Farms, a major chicken processor in California, said it reopened a facility in the state after Covid-19 testing demonstrated that about 14% of its workforce there had recently contracted the virus but wasn’t showing symptoms.
/on.wsj.com/374KQDD

Exchanges, OTC and Clearing

Euronext welcomes 2MX Organic on its Parisian market: the second SPAC listed in France; 300 Million Euros Raised
Euronext
Euronext today congratulated 2MX Organic, company founded by Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari aimed at realizing acquisitions acquisitions in the production and distribution of sustainable consumer goods, for its listing on the professional compartment of Euronext’s regulated market in Paris (ticker code Shares: 2MX, ticker code Warrants: 2MXBS).
/bit.ly/36YbFsQ

Winfarm lists on Euronext Growth Paris; EUR 16.8 MILLION RAISED – MARKET CAPITALISATION OF EUR67.8 MILLION
Euronext
Euronext today congratulated WINFARM for its listing on Euronext Growth Paris (ticker code: ALWF). French leader in distance selling for the agricultural sector, WINFARM proposes to farmers and breeders a range of consulting offers, services, distance selling of equipment and solutions to help them meet the new technological, economic, environmental and social challenges of the new generation of agriculture. Founded in Loudéac, in Brittany, in the early 90s, the family business went public to strengthen its position in its historical markets, diversify into new high-potential areas such as the horse and landscape markets and establish itself on a European scale, notably through external growth operations.
/bit.ly/3n4xYmc

November monthly figures at Eurex and EEX; November sees positive results across all areas at Eurex and EEX
Eurex
Overall volumes of traded financial derivatives at Eurex were up 8% in November – from 138.2 million contracts to 149.5 million – compared to the same month last year. While European equity derivatives saw a fall of 27% year-on-year, European equity index derivatives and European equity interest rate derivative volumes were both up, the former by 32% compared to November 2019.
/bit.ly/3m53sat

Eurex in Asia – a success story with further growth potential
Eurex
Eurex is continuously striving to extend its footprint in Asia. Recent examples are the extension of trading hours into the Asian time zone, a broad range of MSCI index derivatives on Asian underlyings and several co-operations. We talked to Michael Peters, CEO of Eurex, and Randolf Roth, Member of the Executive Board of Eurex responsible for Equity and Equity Index globally, about the strategic drivers behind this strong commitment to Asia.
/bit.ly/3n0kLe9

Equity Index Futures on ESG Indices: Tradability for Participants in the U.S.
Eurex
1. Introduction – With effect from 14 December 2020, the following additional products will be activated for tradability in the U.S.:
/bit.ly/3lYY0pJ

Requirements for the flagging of orders according to MiFID II and MiFIR – identification of natural persons from the United Kingdom after 31 December 2020 (Brexit)
Eurex
Eurex Circular 099/20 Requirements for the flagging of orders according to MiFID II and MiFIR – identification of natural persons from the United Kingdom after 31 December 2020 (Brexit)
/bit.ly/3n75bha

European trade repository REGIS-TR celebrates 10th anniversary
Deutsche Börse Group,
The leading European trade repository REGIS-TR is celebrating its 10th anniversary. The joint venture of Clearstream, part of Deutsche Börse Group, and Iberclear, part of BME Group, was launched on 9 December 2010 in Luxembourg.
/bit.ly/2W2UPCJ

Deutsche Börse AG’s Supervisory Board extends Dr. Christoph Bohm
Deutsche Börse AG
The Supervisory Board of Deutsche Börse AG has appointed Dr. Christoph Böhm (54) extended by five years until the end of October 2026. In his role as CIO / COO, Dr. Böhm took over the information technology division of Deutsche Börse Group.
/bit.ly/36VBBpa

LCH Ltd’s RepoClear welcomes Clearstream as its first clearing member from Luxembourg
LCH
Clearstream is the first member from Luxembourg to clear Sterling debt at LCH Ltd; First ICSD to become a member of RepoClear; Benefits from accessing RepoClear’s large pool of cleared liquidity
LCH, a leading global clearing house, today announced that Clearstream Banking Luxembourg (Clearstream) is the first organisation from Luxembourg to become a clearing member at LCH Ltd’s RepoClear service. By joining the service, Clearstream is able to access the large UK pool of cleared debt at LCH. The International Central Securities Depository (ICSD) will also benefit from the liquidity and risk management efficiencies of central clearing.
/bit.ly/3gvF7JL

Position Limits, Accountability Levels and Large Trader Reporting Requirements in Connection with the Initial Listing of the Cobalt Metal (Fastmarkets) Futures Contract
CME Group
In connection with the initial listing of Commodity Exchange, Inc.’s (“COMEX” or “Exchange”) Cobalt Metal (Fastmarkets) Futures contract on trade date Monday, December 14, 2020 (see SER-8680 published November 19, 2020), please note below and in Exhibit B of COMEX Submission No. 20-463, corresponding spot-month position limit (Rule 559), aggregation allocation (Rule 559.D.), single month and all month accountability levels (Rule 560) and reportable level (Rule 561) for the new contract. The new, financially settled, contract shall have a diminishing balance.
/bit.ly/2K7o58Y

Notice of Summary Action
CME Group
MEMBER FIRM: FUJI HONG KONG COMMODITIES
RULE VIOLATION: Rule 576. IDENTIFICATION OF GLOBEX TERMINAL OPERATORS
PENALTY: On November 18, 2020, pursuant to Rule 512 (“Reporting Infractions”), Fuji Hong Kong Commodities was issued a $2,500 fine for its violation of Rule 576.
/bit.ly/3ndnWiE

SGX reports market statistics for November 2020
SGX
Strong volume gains across equities, FX, iron ore derivatives; Securities daily average value in Singapore climbs
Singapore Exchange (SGX) today released its market statistics for November 2020. Progress in the development of a COVID-19 vaccine bolstered optimism of a global economic recovery, while institutional investors repositioned their portfolios following the U.S. elections, fueling strong derivative volume gains on the exchange across multiple asset classes.
/bit.ly/3lW6QV7

Fintech

U.S. Cyber Firm FireEye Says It Was Breached by Nation-State Hackers; The cybersecurity company said the attack compromised its software tools used to test the defenses of its thousands of customers
Dustin Volz and Robert McMillan – WSJ
U.S.-based FireEye Inc., FEYE 0.71% one of the world’s largest cybersecurity firms, was hacked in what it said was a highly sophisticated foreign-government attack that compromised its software tools used to test the defenses of its thousands of customers.
/on.wsj.com/2K9AUiN

Eventus Systems wins FOW International Award for Market Surveillance Solution of the Year
Eventus Systems
Eventus Systems, Inc., a leading global provider of multi-asset class trade surveillance and market risk solutions, today won the 2020 FOW International Award for Market Surveillance Solution of the Year. London-based Global Investor Group announced the recognition for the firm’s Validus platform this morning in a virtual awards celebration, marking the second consecutive year Eventus took the honor.
/bit.ly/383bL1V

TORA integrates OEMS with Neptune for pre-trade bond analytics; Neptune axe and inventory data for bonds and broker counterparties will be available on the TORA OEMS.
Annabel Smith – The Trade
Trading systems provider TORA has expanded its order and execution management system (OEMS) with pre-trade analytics under a new partnership with Neptune Networks. Traders will be able to view Neptune axe and inventory data for each bond and broker counterparty on the TORA OEMS as part of the agreement.
/bit.ly/36Xtet0

Hiring rapidly, U.S fintech startup Stripe plots Asia expansion
Fanny Potkin – Reuters
U.S. digital payments company Stripe plans to expand across Asia, including in Southeast Asia, Japan, China and India, after boosting its staff in the region by 40% to more than 200 people this year, a senior executive told Reuters.
/reut.rs/3n2tb4X

Robinhood Is Losing Thousands of Traders to a China-Owned Rival
Bloomberg News
Even in a year full of surprises on Wall Street, this one stands out: A Chinese-owned brokerage has quietly built one of the fastest-growing retail trading platforms in the U.S. Webull, founded by Alibaba Group Holding Ltd. alum Wang Anquan, has increased its roster of brokerage clients by about tenfold this year, to more than 2 million, by offering free stock trades with a slick online interface. While that’s still a fraction of the more than 13 million at Robinhood, the broker that popularized commission-free trading, Webull says it’s been peeling off users from its rival. The company has plans to pursue a big funding round from private U.S. investors and may expand into automated financial advice and money management with a so-called robo-adviser service.
/bloom.bg/33Y3HOC

Enabling Open Finance Through APIs – Report By The Consultative Group On Innovation And The Digital Economy (CGIDE) Established At The BIS Representative Office For The Americas
Mondovisione
In response to the need to facilitate payment services and expand the public’s access to them, this report explores the development of an identification and authentication application program interface (API) that could be used to implement privately and publicly administered open finance solutions with seamless scalability. An open finance ecosystem can benefit financial system participants and society in general by creating an environment in which the competitive advantage of different players can be used to provide people with better financial services.
/bit.ly/37OJ88j

MarketAxess Launches Centralized Fixed Income Trading Marketplace with Integrated U.S. Treasury Market Liquidity
MarketAxess (press release)
MarketAxess Holdings Inc., the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced the launch of a centralized fixed income trading marketplace that fully integrates rates trading capabilities within the MarketAxess trading system.
/bit.ly/3mZWmW8

Cryptocurrencies

Crypto Execs Say Finance Isn’t Ready for Digital Transition
Joanna Ossinger – Bloomberg
Levy-Weiss says banks need to integrate blockchain projects; Digital currencies have soared in popularity as prices surge
Traditional finance has a long way to go before it’s ready to embrace digital currencies, say crypto executives. Many companies are still focused on quarterly profits and shareholders, but that model is going to be challenged in the next decade, speakers at the “Digital Money 2030” panel at the Singapore Fintech Festival said Tuesday. Tim Grant, the CEO of SIX Digital Exchange, said the future financial system should benefit everyone.
/bloom.bg/3guyZSn

Will bitcoin end the dollar’s reign? Digital currency poses a significant threat to greenback’s supremacy
Ruchir Sharma – FT
When the pandemic hit, the US dollar was as mighty as ever. Despite talk of faltering American supremacy, the dollar ruled as the medium of international trade, the anchor against which other nations value their currencies, and the “reserve currency” most central banks hold as savings.
/on.ft.com/3m123lB

MicroStrategy to Raise $400 Million to Buy Even More Bitcoin
Kristine Owram – Bloomberg
MicroStrategy Inc. is doubling down on its Bitcoin bet, saying Monday that it plans to offer $400 million of convertible bonds in order to buy more of the cryptocurrency. The proceeds from the offering will be invested in Bitcoin “pending the identification of working capital needs,” the Virginia-based company said in statement.
/bloom.bg/2VW36Zh

Latin America Reports Surge in Bitcoin Trading
Bilal Jafar – Finance Magnates
LocalBitcoins, a peer-to-peer bitcoin marketplace recently announced its biggest markets in 2020. Venezuela and Colombia have accounted for more than 23% of the total bitcoin trading volume on the platform this year. According to the report, Russia remained the biggest market for peer-to-peer bitcoin trading on its platform with a share of 17.4%. The South American country Venezuela accounted for 12.3% of the total share, followed by another Latin American nation Colombia with 11.3%.
/bit.ly/33Z8105

France is on the verge of imposing mandatory KYC rules for all crypto transactions, industry sources say
Yogita Khatri – The Block
France is set to bring new, stringent measures for the crypto sector, The Block has learned. The country’s finance ministry is preparing to not only harden know-your-customer (KYC) rules for crypto firms but also bring crypto-to-crypto exchanges under regulation, Simon Polrot, president of French crypto association ADAN, told The Block in an interview. The main reason for the proposed stricter measures are the recent terrorist attacks on France, these sources told The Block.
/bit.ly/39WKS1R

Ensuring trust in crypto is tough, but audits and transparency go a long way
Rachel Wolfson – Cointelegraph
Cryptocurrency platforms perform audits to ensure transparency, but it’s not a golden solution to solve all potential trust and security issues. On Dec. 9, the total market capitalization of cryptocurrencies soared past $535 billion. This is a significant increase from last year, when the cumulative market capitalization of cryptocurrencies was just over $199 billion. With such impressive growth underway, it shouldn’t come as a surprise that companies operating in the cryptocurrency sector are taking additional measures to ensure trust among investors. For instance, some cryptocurrency platforms have begun to publicly announce audits to confirm the number of digital assets held under management.
/bit.ly/370xB6U

Square pledges net-zero carbon emissions by 2030, unveils support for greener Bitcoin mining
MK Manoylov – The Block
Payments company Square has pledged to support renewable energy-backed Bitcoin mining operations as part of a broader green initiative. According to a Tuesday morning press release, Square aims to become carbon-neutral by 2030. That includes reducing the company’s Scope 3 emissions, which the U.S. Environmental Protection Agency describes as pollution upstream and downstream of an organization which it doesn’t directly control.
/bit.ly/3owIliY

Facebook’s rebranded cryptocurrency Diem is a ‘wolf in sheep’s clothing,’ Germany’s finance minister says
Shalini Nagarajan – Markets Insider
Facebook’s renamed cryptocurrency is a “wolf in sheep’s clothing” and does not change the underlying risks that come with it, Germany’s finance minister said on Monday. “It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed,” Olaf Scholz said after a G7 meeting. Financial leaders and central bankers have underscored the need to regulate digital currencies. Facebook changed Libra’s name to Diem to stress a simpler, revamped structure.
/bit.ly/3n2Zxwa

Standard Chartered, Northern Trust to Launch Crypto Custody Service in the UK
Tanzeel Akhtar – Coindesk
Standard Chartered’s fintech investment unit, SC Ventures, and Northern Trust are to launch a U.K.-based cryptocurrency custodian for institutional clients. Called Zodia Custody, the new firm is currently pending approval by the U.K.’s Financial Conduct Authority under local money laundering regulations. Once approved, the new company will provide custody services for bitcoin and ethereum, initially, with litecoin, bitcoin cash and XRP to follow.
/bit.ly/3gsl677

Politics

Fannie-Freddie Investors’ Profit Chase Gets Supreme Court Airing
Greg Stohr and Joe Light – Bloomberg
The U.S. Supreme Court is poised to consider the fate of a lawsuit that could mean billions of dollars for shareholders of Fannie Mae and Freddie Mac and affect the push to end federal control of the mortgage giants.
In a 90-minute argument Wednesday, the justices will consider whether investors can challenge the 2012 agreements that let the government collect more than $300 billion in profits from Fannie and Freddie. A ruling in investors’ favor would give them a chance to collect a massive settlement.
/bloom.bg/3mW2TRL

The Debate on ‘Systemic Racism’ and Why It Matters
Maria Eloisa Capurro – Bloomberg
In 2020, two events changed the nature of America’s long-running debate over racism: the killing of George Floyd by a Minneapolis police officer, and Covid-19 hitting Black and Latino communities disproportionately hard. Protesters argued that ending injustice in the criminal justice and health systems required looking beyond one officer or outbreak to confront “systemic racism.” President-elect Joe Biden has said that confronting the issue is one of his top priorities.
/bloom.bg/3guzzzx

One-off 5% wealth tax would raise £262bn to cover Covid costs, study finds; Researchers examined UK levy on net assets above £500,000, which would affect 8m residents
Emma Agyemang – FT
Introducing a one-off UK wealth tax of 5 per cent on net assets above £500,000 would raise more than £260bn for the country’s coronavirus-ravaged public finances, according to a report published on Wednesday.
/on.ft.com/3grYCmN

Regulation

Get SET — State Examiner Training
FINRA
FINRA and NASAA are bringing securities regulators together for a joint virtual conference dedicated to training state securities examiners on conducting broker-dealer examinations. This collaborative, two-day event focuses on strategies and solutions to help examiners strengthen their skills and ability to protect the investing public. Day 1 is geared for examiners with 0-3 years of broker-dealer examination experience. Day 2 is structured for examiners with more than 3 years of broker-dealer examination experience. Examiners with any level of experience are welcome to attend both days.
/bit.ly/3m1c3eD

FINRA Test Facility Availability
FINRA
The FINRA Test Facility (NTF) will be undergoing systemic maintenance and will be unavailable for TRAQS and API reference data users all day on Friday, December 11, 2020.
/bit.ly/3n0JG1t

SEC Orders BlueCrest to Pay $170 Million to Harmed Fund Investors
SEC
The Securities and Exchange Commission today announced that UK-based investment adviser BlueCrest Capital Management Limited has agreed to pay $170 million to settle charges arising from inadequate disclosures, material misstatements, and misleading omissions concerning its transfer of top traders from its flagship client fund, BlueCrest Capital International (BCI), to a proprietary fund, BSMA Limited, and replacement of those traders with an underperforming algorithm. The SEC will distribute the $170 million to harmed investors.
/bit.ly/3lUUaOo

CFTC Approves Two Final Rules at December 8 Open Meeting; Commission Adopts First Overhaul of Bankruptcy Rules in 37 Years
CFTC
The Commodity Futures Trading Commission at its open meeting today approved the following final rules: Final Rule: Electronic Trading Risk Principles
The Commission approved amendments to CFTC Regulation Part 38 to address the potential risk of a designated contract market’s (DCM) trading platform experiencing a market disruption or system anomaly due to electronic trading. The final rules set forth three principles applicable to DCMs concerning:
/bit.ly/3gsgFsZ

CFTC Unanimously Approves Final Rules Related to SEFs and Withdraws Unadopted Proposals
CFTC
The Commodity Futures Trading Commission announced that it has approved two final rules related to SEFs, and withdrawn proposals that were not adopted. The Commission approved these items in advance of today’s Open Meeting.
/bit.ly/2Iv0qia

CFTC Unanimously Approves Technical Amendments to Reflect Organizational Changes
CFTC
In advance of today’s open meeting, the Commodity Futures Trading Commission today unanimously approved a final rule making technical amendments to CFTC regulations to align with recent organizational changes, remove superfluous verbiage, and correct inaccurate text and typographical errors. The amendments also ensure consistency of Commission addresses.
/bit.ly/2W2XGvr

CFTC Unanimously Approves Final Rules Related to Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants
CFTC
In advance of today’s open meeting, the Commodity Futures Trading Commission approved two final rules related to margin requirements for uncleared swaps for swap dealers (SD) and major swap participants (MSP).
/bit.ly/3gwjokU

Statement of Chairman Heath P. Tarbert in Support of the Final Rule on Electronic Trading Risk Principles
CFTF
The mission of the CFTC is to promote the integrity, resilience, and vibrancy of U.S. derivatives markets through sound regulation. We cannot achieve this mission if we rest on our laurels—particularly in relation to the ever-evolving technology that makes U.S. derivatives markets the envy of the world. What is sound regulation today may not be sound regulation tomorrow.
/bit.ly/2VTZRkX

Statement of Support by Commissioner Brian D. Quintenz Regarding Final Rule on Electronic Trading Risk Principles
CFTC
/bit.ly/3n4CYHu

Dissenting Statement of Commissioner Rostin Behnam Regarding Electronic Trading Risk Principles
CFTC
/bit.ly/2K7Dhmx

Statement of Commissioner Dawn D. Stump in Support of Final Rules Related to Electronic Trading Risk Principles
CFTC
/bit.ly/2KbhSZp

Statement of Commissioner Dan M. Berkovitz Regarding Risk Principles for Electronic Trading
CFTC
/bit.ly/3n1Q88l

Reminder: Compliance Date for NFA’s Swaps Proficiency Requirements is January 31, 2021
NFA
As a reminder, the compliance date for NFA’s Swaps Proficiency Requirements is January 31, 2021. NFA Members with associated persons (AP) required to satisfy NFA’s Swaps Proficiency Requirements must ensure these individuals do so by January 31, 2021. Individuals who do not satisfy the Swaps Proficiency Requirements by the compliance date will be unable to engage in swaps activities until they have done so.
/bit.ly/2K7DKoN

Dutch prosecutors to investigate UBS chief over ING money laundering case
Brenna Hughes Neghaiwi, Toby Sterling – Reuters
A Dutch court on Wednesday ordered a criminal investigation into the role UBS Chief Executive Ralph Hamers played in ING Group’s failure to crack down on money laundering when he was head of the Dutch bank.
/reut.rs/3n2Kd2G

Robert Stebbins to Conclude Tenure as SEC General Counsel
SEC
The Securities and Exchange Commission today announced that Robert B. Stebbins will conclude his tenure as General Counsel in early January, after serving over three and a half years as the agency’s chief legal officer.
/bit.ly/33Xbhcg

Statement on Bob Stebbins Concluding His Tenure at SEC
Chairman Jay Clayton – SEC
The SEC’s General Counsel, Bob Stebbins, today announced he will conclude his tenure at the agency in early January.
/bit.ly/3oOLY4j

Investing and Trading

Ray Dalio Sees ‘Flood of Money’ With Soaring Asset Prices
Nathan Crooks – Bloomberg
Ray Dalio stressed the importance of diversification in a Reddit Ask Me Anything event on Tuesday where he said that a “flood of money and credit” was unlikely to recede. “Assets will not decline when measured in the depreciating value of money,” the billionaire investor told users of the discussion network who asked for his perspective on where financial markets are headed. “I believe that with the enormous amount of debt and money that has been created and will be created in the future, the most important thing to pay attention to is the value of debt and money relative to the value of assets and other currencies.”
/bloom.bg/3m2hhXc

Egypt Buys ‘Huge’ Oil Hedge to Lock In Gains from Price Rout
Mirette Magdy – Bloomberg
Finance minister says Egypt almost doubled hedging this year; Country may also protect itself against rising wheat prices
Egypt has bought more derivative contracts to protect itself against a rise in oil costs, as some importers seek to take advantage of this year’s price rout. The most populous Arab nation has almost doubled its oil hedges during the 2020-21 fiscal year ending in June, Finance Minister Mohamed Maait said in an interview.
/bloom.bg/3m0xX1s

The case against cancelling debt at the ECB; Calls for the central bank to write down government bonds are misguided
The editorial board – FT
With eurozone governments’ responses to the coronavirus pandemic set to rack up EUR1.5tn of extra debt, several senior Italian officials including the prime minister’s economic adviser have suggested the European Central Bank should forgive governments the debt bought through quantitative easing. Cancelling sovereign debt the ECB has gathered or extending its maturity perpetually, they say, would free up more resources for the government to support the recovery. The idea has caused consternation in France and Germany. The ECB is right to stand firm against it.
/on.ft.com/3nddHec

Covid-19 Pandemic Puts Squeeze on Pension Plans; Pension managers face hard choice of taking on increased risk or seeking more money from employers and workers
Heather Gillers – WSJ
America’s pension managers are facing a tough choice nine months into the Covid-19 pandemic: take on more risk, or ask for more money from employers and workers.
/on.wsj.com/3703A6X

Former Allergan CEO’s SPAC Agrees to $1.1 Billion Merger With Beauty Products Company; HydraFacial’s private-equity owners, Linden Capital Partners and DW Healthcare Partners, will retain a combined 25% stake in the business following the merger
Laura Cooper – WSJ
A blank-check company backed by former Allergan PLC Chief Executive Brent Saunders is set to merge with a private equity-backed health and beauty company in a deal valued at $1.1 billion. Mr. Saunders’ vehicle, Vesper Healthcare Acquisition Corp., is set to combine with the HydraFacial Co., a producer of skin-care products and treatments sold by beauty retailers, spas and dermatology clinics. Once completed, the deal will take the private equity-owned company onto the public market.
/on.wsj.com/2VXwDSs

Commodities-Trading Giant Trafigura Wins Big From Oil-Market Mayhem; When oil prices went negative during coronavirus lockdowns, the trading giant had its busiest month ever
David Hodari – WSJ
Trafigura Group Pte. Ltd., one of the world’s largest commodities traders, posted a record profit Wednesday, making it a big winner from turmoil in crude-oil markets during the coronavirus pandemic. The closely held company, which is based in Singapore but run from Geneva, almost doubled its net profit to $1.6 billion in the fiscal year ended September. The company’s operating earnings were the best in its 27-year history, it said.
/on.wsj.com/3gr1xMu

Environmental, Social and Corporate Governance

These Trees Are Not What They Seem; How the Nature Conservancy, the world’s biggest environmental group, became a dealer of meaningless carbon offsets.
Ben Elgin – Bloomberg
At first glance, big corporations appear to be protecting great swaths of U.S. forests in the fight against climate change. JPMorgan Chase & Co. has paid almost $1 million to preserve forestland in eastern Pennsylvania.
/bloom.bg/3guF3dn

Wind Farm Backlash Grows in Oil-Rich Norway Ahead of Election
Lars Erik Taraldsen, Lars Paulsson, and Jesper Starn – Bloomberg
Energy Minister Tina Bru targeted by opponents of renewables; Nation needs more clean energy to feed growing power demand
After being harassed on social media and told repeatedly that she’s a traitor who should be in jail, Norway’s 34-year-old energy minister is bracing for a controversial election campaign.
/bloom.bg/3mW0x5k

ESG Bonds Offer Rare Bright Spot Next Year in Europe
V Ramakrishnan – Bloomberg
Buyer demand, new bond types may help fuel ESG debt sales; New issuers from energy, consumer goods may aid market: HSBC
Socially responsible bonds are one of the few areas of optimism amid generally downbeat outlooks for 2021 European credit sales.
/bloom.bg/3lUFa32

Milton Friedman was wrong on the corporation; The doctrine that has guided economists and businesses for 50 years needs re-evaluation
Martin Wolf – FT
What should be the goal of the business corporation? For a long time, the prevailing view in English-speaking countries and, increasingly, elsewhere was that advanced by the economist Milton Friedman in a New York Times article, “The Social Responsibility of Business is to Increase Its Profits”, published in September 1970. I used to believe this, too. I was wrong.
/on.ft.com/3m2CbFP

Optiver urges action from market participants to speed up ESG transition; Five steps have been outlined by Optiver to improve liquidity and accelerate the adoption of ESG products.
Annabel Smith – The Trade
Dutch market maker Optiver has called on market participants to accelerate the adoption of environmental, social governance (ESG) products with five key steps focussed on liquidity and disclosure. The five steps to speed up ESG adoption include minimising transaction costs for end-investors and incentivising a more liquid order book with market-making schemes so that ESG products are priced competitively.
/bit.ly/2VSYlQi

Institutions

JPMorgan Says Equities to Get a $1.1 Trillion Boost Next Year
Jan-Patrick Barnert – Bloomberg
Those with a bullish outlook for stocks in 2021 are set to get another uplift: more demand and less supply to the tune of $1.1 trillion. That’s the conclusion of global market strategists at JPMorgan Chase & Co. as they expect a rise in equity demand of about $600 billion relative to this year. Meanwhile, supply will drop by $500 billion, returning to the very low levels of 2016 to 2018, the strategists led by Nikolaos Panigirtzoglou wrote in a note.
/bloom.bg/3m1dzxg

Deutsche Bank’s Sewing Signals Bonuses Will Reflect Trading Wins
Nicholas Comfort, Daniel Schaefer, and Steven Arons – Bloomberg
CEO says bank will ‘honor’ commitment to pay for performance; Bank saw 23% jump in fixed income revenue in November
Deutsche Bank AG Chief Executive Officer Christian Sewing signaled that he plans to reward traders after a surge in fixed-income trading revenue at the investment bank, joining lenders including JPMorgan Chase & Co. which expect to boost variable pay.
/bloom.bg/3m0cHsH

Deutsche Bank Leans on Traders as Corporate Bank Outlook Cut
Steven Arons – Bloomberg
Says revenue momentum continued in final months of year; CEO Sewing’s turnaround increasingly depends on trading unit
Deutsche Bank AG said a trading rally that lifted revenue this year continued into the fourth quarter and will help boost growth through 2022, as Chief Executive Officer Christian Sewing relies increasingly on the investment bank for his turnaround plan.
/bloom.bg/3lVTwQB

Deutsche Bank ‘switching from defence to offence’, chief tells investors; Germany’s largest lender steps up cost-cutting and revises upwards financial targets
Olaf Storbeck – FT
Deutsche Bank is relying on increased cost-cutting, a better than expected performance of its revitalised investment bank and higher leverage as it is “switching from defence to offence”, according to its chief executive.
/on.ft.com/36ZY9F9

LGIM rolls out first fixed income ETFs; UK’s largest fund house is seeking to leverage expertise to make gains in rapidly expanding market
Steve Johnson – FT
Legal & General Investment Management is launching its first fixed income exchange traded funds as the UK’s largest fund house makes a bid to catch up with faster-moving rivals in the ETF market.
/on.ft.com/2W2Ncfz

Trading app Robinhood hires Goldman Sachs to lead IPO
Reuters
Stock trading app Robinhood Markets has picked Goldman Sachs to lead preparations for an initial public offering which could come next year and value it at more than $20 billion, people familiar with the matter said on Tuesday.
/bit.ly/3guQCBj

Citigroup heads to trial seeking to undo nearly $900 million Revlon blunder
Reuters Staff
Citigroup Inc is heading to trial on Wednesday, hoping to convince a Manhattan federal judge to undo a nearly $900 million blunder where it used its own money to repay lenders of Revlon Inc, the struggling cosmetics company.
/reut.rs/371YqHQ

Regions

China’s Pork-Driven Deflation Unlikely to Push PBOC Off Course
Bloomberg News
Food prices dropped, largely because of slump in pork; Central bank has signaled it wants to withdraw stimulus
China’s central bank is likely to look through the first deflation in consumer prices in over a decade, economists said, as it keeps its focus on bringing debt under control.
/bloom.bg/3gtxLGG

Fall of China’s ‘most profitable’ coal miner is a cautionary tale; Renowned energy group’s decline shows dangers of reckless borrowing by state companies
Sun Yu in Yongcheng and Tom Mitchell – FT
Less than a decade ago, Yongcheng Coal and Electricity Holding was one of China’s most celebrated energy companies. Blessed with ample reserves of high-grade coal at its mines in China’s central Henan province, the nation’s government-controlled banks were eager to hand the firm cheap credit. At its height in 2013, the business’s annual revenue was Rmb127.4bn ($19.5bn).
/on.ft.com/36Y5Sn6

China Hails Victory in Crackdown on Peer-to-Peer Lending; Central-bank official says, ‘by mid-November the actual operating P2P lenders had all been zeroed out’
Chong Koh Ping and Xie Yu – WSJ
China has declared victory in its campaign against online peer-to-peer lenders, a risky financing sector that has been zeroed out, a top banking regulator said this week.
/on.wsj.com/2K7i1gI

European Commission launches consultation to review CSDR and buy-in regime; The majority of industry bodies and market participants will most likely focus their feedback on the settlement penalties and the buy-in components of CSDR.
Joe Parsons – The Trade
The European Commission has opened its review of the Central Securities Depository Regulation (CSDR) and its controversial buy-in regime after launching an industry consultation on the rules.
/bit.ly/2Iw6ozr

Aging China Must Work Longer and Invest Smarter; An aging population may finally force the government to face long-needed reform challenges head on
Jacky Wong – WSJ
China is getting older. That means the Chinese people will have to work longer. But deeper reforms will also be necessary to ensure income growth doesn’t stagnate.
/on.wsj.com/3n288zs

Brexit

Merkel Says Fair Competition Is Vital for a Deal: Brexit Update
Ian Wishart and Kitty Donaldson – Bloomberg
Boris Johnson will head to Brussels for dinner with the European Commission’s Ursula von der Leyen Wednesday, amid warnings from Germany that any U.K.-EU trade deal will hinge on agreeing to fair competition rules for businesses in future.
/bloom.bg/3m6ZzlK

Remainers must not gloat over Brexit’s failures; The electorate will not reward those who appear to wish for disaster
Robert Shrimsley – FT
Somewhere in England, the prime minister is speaking. He is in Downing Street, or perhaps in parliament. It is late December, or early January. His chin is out; his tone defiant.
/on.ft.com/3lZYc8m

UK PM Johnson warns EU over Brexit trade talks: back down or it’s no-deal
Guy Faulconbridge, Elizabeth Piper, Kate Holton – Reuters
British Prime Minister Boris Johnson warned the European Union on Wednesday it must scrap demands which he says are unacceptable if there is to be a Brexit trade deal to avoid a turbulent breakup in three weeks.
/reut.rs/371YBTw

As Brexit Talks Stall, Boris Johnson Offers the E.U. an Olive Branch
Stephen Castle – The New York Times
For weeks, Prime Minister Boris Johnson of Britain has played an extreme version of hardball over Brexit, threatening to break international law and renege on a treaty he signed with the European Union if it fails to strike a new trade agreement with him soon. On Tuesday, though, Mr. Johnson dropped that threat, raising hopes that a more diplomatic approach could yield a breakthrough in cliff-edge trade talks planned for Wednesday with Ursula von der Leyen, the president of the European Commission, the bloc’s executive body.
/nyti.ms/3n08re8

Johnson Says No U.K. Leader Could Accept EU Terms: Brexit Update
Alex Morales and Ian Wishart – Bloomberg
Boris Johnson said no British prime minister could accept the European Union’s Brexit demands as he prepared to head to Brussels for a showdown with the European Commission’s Ursula von der Leyen on Wednesday. The premier’s team hopes the face-to-face conversation with the Commission president will inject political impetus into the deadlocked process. If the dinner goes well, negotiators could be back in a room hammering out the details within hours. If it goes badly, officials on both sides fear the chances of an agreement being ready before the end of December — when the Brexit transition period expires — will fade away.
/bloom.bg/3guojCX

EBA Informs Customers Of UK Financial Institutions About The End Of The Brexit Transition Period
Mondovisione
The United Kingdom (UK) left the European Union (EU) on 31 January 2020. Under the Withdrawal Agreement reached between the EU and UK, EU law applies in the UK during a transition period until 31 December 2020. This means that EU law will stop to apply in the UK as of 1 January 2021, and from that date onwards, UK financial institutions not holding a valid authorisation from the supervisory authorities in the EU will lose the right to provide financial services in the EU.
/bit.ly/2LniJqL

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